All-party team led by Chavan submits memorandum to Manmohan

Prime Minister Manmohan Singh had asked the three-member ministerial committee looking into the problems being faced by the sugar industry to finalise its decision in the next few days as the situation was “serious,” Maharashtra Chief Minister Prithviraj Chavan told journalists here on Tuesday.

Mr. Chavan, leading an all-party delegation, including the Nationalist Congress Party, the Bharatiya Janata Party, the Shiv Sena, the Maharashtra Navnirman Sena and the Shetkari Sangathan, submitted a memorandum of demands to the Prime Minister.

The panel of Ministers, headed by Union Agriculture Minister Sharad Pawar, has Union Finance Minister P. Chidambaram and Civil Aviation Minister Ajit Singh as members. Mr. Chavan suggested that the Chief Ministers of sugar-growing States and Petroleum Minister M. Veerappa Moily also be included.

Last week, the senior Ministers “informally” met when Mr. Pawar had declared that a decision on industry demands would be taken in 10 days.

Crushing of sugarcane should have begun in November but while the industry is on a go-slow, the farmers in several cane growing States are agitating against the low remunerative price for sugarcane and delay in payment of arrears.

In Uttar Pradesh, farmers organisations are staging dharnas at all district headquarters from Wednesday, while Ajit Singh’s Rashtriya Lok Dal has announced “chakka jam” (road blocks) from next month if standing cane is not bought and crushing does not begin.

Barely a year after it was de-controlled and quarterly quota releases and levy sugar obligation for the public distribution system were removed, the industry is complaining of high stocks and drop in sugar prices making cane crushing operations financially unviable. They are seeking a buffer stock on government account, higher duty on imported sugar, incentives on export of sugar and interest-free loans to be able to pay sugarcane growers.

Crash in market price

The country, they say, has a surplus stock of 90 lakh tonnes of sugar. According to them, the price in the open market have “crashed” from Rs. 34 a kg to Rs. 26 and that they are unable to pay Fair and Remunerative price (set at Rs. 210 a quintal) to farmers for sugarcane. As per government figures, however, open market sugar prices are hovering between Rs. 33 to Rs. 40 a kg.

BJP leader Gopinath Munde, who accompanied Mr. Chavan, blamed Mr. Pawar and Mr. K.V. Thomas for the present sugar crisis. “The situation has come to this as the release mechanism was done away with and 17 lakh tonnes of imported sugar was allowed to come in. Now government should give subsidy for sugar export, restructure payback of bank loans and raise sugar import duty.”